Who Is Brian Sack?

In 2004, two prominent Federal Reserve officials, and one little known economist, wrote an intriguing paper which presented evidence that the central bank should buy Treasury bonds to drive down long-term interest rates if the economy ever ran off the rails. The two officials were Ben Bernanke, then a Fed governor, and Vincent Reinhart, then the head of the Fed’s powerful monetary affairs group. The little known economist was Brian Sack, a rising star who had just completed a stint as a staff researcher at the Fed.

Today, the Federal Reserve Bank of New York named Mr. Sack, now 38, to run its powerful markets desk. In normal times, the desk is in charge of managing the Fed’s target federal funds rate to make sure it meets the central bank’s target. In the past year, the desk’s power has vastly expanded. As the Fed has moved toward more unconventional policies to battle the financial crisis, the markets desk has had to dream up programs to fix the commercial paper markets, buy hundreds of billions of dollars worth of mortgage backed securities and revive consumer loan markets.

One of Mr. Sack’s big jobs will be to implement the Fed’s program to buy up to $300 billion worth of long-term government bonds, just the policy he, Mr. Reinhart and Mr. Bernanke advocated in their 2004 paper. Their theory at the time was that a really dour economy could drive the Fed’s target short-term interest rate (the fed funds rate) to zero. Then it would need to find other ways to boost the economy. Long-term Treasury purchases were one approach that could work they said, because such purchases would drive down long-term rates and could stimulate growth.

Mr. Sack received his PhD from the Massachusetts Institute of Technology in 1997, where his dissertation advisers were Olivier Blanchard, now chief economist at the International Monetary Fund., and Jeremy Stein, now working in the Obama White House. One challenge for the professional economist could be navigating the ways of Wall Street. There’s no doubt it’s a good career move. His predecessor, Bill Dudley, now runs the New York Fed.